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9 November 2004 - Doosan Heavy Industries and Construction is the chosen suitor to take over once-defunct Daewoo Heavy Industries and Machinery, the largest defence and construction equipment maker in Korea.
The Public Fund Oversight Committee said yesterday that Doosan was selected from seven bidders after it promised to pay 1.8tn won ($1.6bn). Doosan will have a month to negotiate with Korea Asset Management Corp., which is arranging the sale. If talks are not wrapped up within this term, Korea Asset will begin discussions with Hyosung Corp., the second-highest bidder.
The government is selling 31 percent of Daewoo shares owned by the state-run Korea Asset and 20 percent held by the Korea Development Bank - the total of 51 percent will give the new owner management rights. Daewoo was bailed out by the government during the financial crisis of 1997-98. Its sale will help recoup part of the 164.8 trillion won spent on rescuing ailing companies and banks.
In a related development, Daewoo's labour union and metalworkers under the Korean Confederation of Trade Unions said they will hold a press conference today to protest the sale and will attempt to block Doosan from surveying the grounds. In 2000, Doosan conducted a mass layoff after buying Korea Heavy Industries and Construction.
To ease fears, Doosan announced yesterday after its selection that it would maintain Daewoo Heavy as an independent company and retain all employees for three years if it succeeds in the acquisition.
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